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What changed in VISHAY INTERTECHNOLOGY INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of VISHAY INTERTECHNOLOGY INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+296 added−242 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-22)

Top changes in VISHAY INTERTECHNOLOGY INC's 2023 10-K

296 paragraphs added · 242 removed · 178 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeApproximately 15% of our annual Resistors segment revenues are generated by products that were developed in the previous five years. Inductors Segment Inductors also impede electric current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our traditional business, the inductors product line has grown significantly in recent years.
Biggest changeInductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our traditional business, the inductors product line has grown significantly in recent years. We are a market leader with a strong technology base, many specialty products, and strong name recognition (such as our IHLP® and HiRel Systems brands).
All of our Optoelectronic Components segment products are non-commodity or custom products. Approximately 25% of our annual Optoelectronic Components segment revenues are generated by products that were developed in the previous five years. 8 Passive Components Our passive components include resistors, inductors, and capacitors.
All of our Optoelectronic Components segment products are non-commodity or custom products. Approximately 25% of our annual Optoelectronic Components segment revenues were generated by products that were developed in the previous five years. 8 Passive Components Our passive components include resistors, inductors, and capacitors.
To view the reports, access ir.vishay.com and click on “SEC Filings.” The following corporate governance related documents are also available on our website: • Corporate Governance Principles • Code of Business Conduct and Ethics • Code of Ethics for Financial Officers • Audit Committee Charter • Nominating and Corporate Governance Committee Charter • Compensation Committee Charter • Executive Stock Ownership Guidelines • Director Stock Ownership Guidelines • Clawback Policy • Hedging-Pledging Policy • Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors • Related Party Transactions Policy • Ethics Helpline To view these documents, access ir.vishay.com and click on “Corporate Governance.” Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 14
To view the reports, access ir.vishay.com and click on “SEC Filings.” The following corporate governance related documents are also available on our website: • Corporate Governance Principles • Code of Business Conduct and Ethics • Code of Ethics for Financial Officers • Audit Committee Charter • Nominating and Corporate Governance Committee Charter • Compensation Committee Charter • Executive Stock Ownership Guidelines • Director Stock Ownership Guidelines • Clawback Policy • Hedging-Pledging Policy • Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors • Related Party Transactions Policy To view these documents, access ir.vishay.com and click on “Corporate Governance.” Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 14
Our net cash position and short-term investment balance, available revolving commitment, and strong “free cash” flow generation provide financial strength and flexibility and reduce our exposure to future economic uncertainties. 5 Our Key Challenges Economic Environment Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate.
Our net cash position and short-term investment balance, available revolving commitment, and “free cash” flow generation provide financial strength and flexibility and reduce our exposure to future economic uncertainties. 5 Our Key Challenges Economic Environment Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate.
Approximately 30% of our annual Diodes segment revenues are generated by products that were developed in the previous five years. Optoelectronic Components Segment Optoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presence in both the commodity and non-commodity markets.
Approximately 30% of our annual Diodes segment revenues were generated by products that were developed in the previous five years. Optoelectronic Components Segment Optoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presence in both the commodity and non-commodity markets.
We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in the United States, Germany, Italy, Israel, the People’s Republic of China, France, and the Republic of China (Taiwan).
We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in the United States, Germany, Italy, Israel, Ireland, the People’s Republic of China, France, and the Republic of China (Taiwan).
Reflecting our global business, our executive management team and many leadership positions are dispersed throughout the world. 12 Employees by location are summarized as follows: United States 2,300 People’s Republic of China 7,600 Germany 2,300 Israel 2,400 Taiwan 2,000 Czech Republic 1,200 India 1,100 Other Europe 1,600 Other Americas 1,400 Other Asia 2,000 Total 23,900 Many of our employees outside the United States are members of workers councils or unions, or otherwise subject to collective bargaining agreements.
Reflecting our global business, our executive management team and many leadership positions are dispersed throughout the world. 12 Employees by location are summarized as follows: United States 2,400 People’s Republic of China 7,300 Germany 2,300 Israel 2,300 Taiwan 2,000 Czech Republic 1,200 India 1,000 Other Europe 1,600 Other Americas 1,500 Other Asia 1,900 Total 23,500 Many of our employees outside the United States are members of workers councils or unions or otherwise subject to collective bargaining agreements.
Our passive components are used to restrict current flow, suppress voltage increases, store and discharge energy, control alternating current (“AC”) and voltage, filter out unwanted electrical signals, and perform other functions. The Vishay Story For almost six decades we have been building what we call The DNA of tech. TM The Vishay journey began with one man, the late Dr.
Our passive components are used to restrict current flow, suppress voltage increases, store and discharge energy, control alternating current (“AC”) and voltage, filter out unwanted electrical signals, and perform other functions. The Vishay Story For over six decades we have been building what we call The DNA of tech. TM The Vishay journey began with one man, the late Dr.
Recent Events: Supply Chain Disruption The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party contractors, shipping partners, distributors, and end market customers. Our production and results of operations can be negatively impacted by disruptions to any part of the supply chain, many of which are beyond our control.
Supply Chain Disruption The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party contractors, shipping partners, distributors, and end market customers. Our production and results of operations can be negatively impacted by disruptions to any part of the supply chain, many of which are beyond our control.
Approximately 25% of our annual Capacitors segment revenues are generated by products that were developed in the previous five years. 9 Military Qualifications We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain European military specifications.
Approximately 30% of our annual Capacitors segment revenues were generated by products that were developed in the previous five years. 9 Military Qualifications We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain European military specifications.
Human Capital As a global company, we collaborate internationally and celebrate the diversity of our local cultures. Employees are encouraged to bring their unique perspectives, help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others. As of December 31, 2022, we employed approximately 23,900 full time employees worldwide.
Human Capital As a global company, we collaborate internationally and celebrate the diversity of our local cultures. Employees are encouraged to bring their unique perspectives, help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others. As of December 31, 2023, we employed approximately 23,500 full time employees worldwide.
With selected customers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 70% of our total net revenues. No single customer comprised more than 10% of our total net revenues for 2022. In certain areas we also work with sales representatives.
With selected customers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 68% of our total net revenues. No single customer comprised more than 10% of our total net revenues for 2023. In certain areas we also work with sales representatives.
We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products. We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many markets. Commodity products generally comprise about 35% to 40% of our annual revenues.
We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products. We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many markets. For 2023, commodity products comprised 31% of our revenues.
Substantially all of our Inductors segment products are non-commodity or custom products. Approximately 20% of our annual Inductors segment revenues are generated by products that were developed in the previous five years. Capacitors Segment Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products.
Approximately 15% of our annual Inductors segment revenues were generated by products that were developed in the previous five years. Capacitors Segment Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products.
We have often targeted high margin niche business acquisitions. We also target strategic acquisitions of businesses with technology and engineering capabilities that we can further develop and commercialize to grow our business.
We have often targeted high margin niche business acquisitions. We also target strategic acquisitions of businesses with technology and engineering capabilities that we can further develop and commercialize to grow our business and key niche suppliers that allow us to vertically integrate our supply chain.
It also includes certain businesses that possess technologies which we expect to further develop and commercialize. Cost Management We place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs.
It also includes certain businesses that possess technologies which we expect to further develop and commercialize and key niche suppliers that allow us to vertically integrate our supply chain. Cost Management We place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs.
Non-commodity products generally comprise about 40% to 45% of our annual revenues. We also sell several custom products. Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. Custom products generally comprise about 20% to 25% of our annual revenues.
For 2023, non-commodity products comprised 47% of our revenues. We also sell several custom products. Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. For 2023, custom products comprised 22% of our revenues.
Financial Strength and Flexibility As of December 31, 2022, our cash and short-term investment balance exceeded our debt balance by $415.2 million. We also maintain a credit facility, which provides a revolving commitment of up to $750 million through June 5, 2024, of which $707.1 million was available as of December 31, 2022.
Financial Strength and Flexibility As of December 31, 2023, our cash and short-term investment balance exceeded our debt balance by $190.3 million. We also maintain a credit facility, which provides a revolving commitment of up to $750 million through May 8, 2028, of which substantially all was available as of December 31, 2023.
Our thyristors or SCR (silicon-controlled rectifiers) are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules business (IGBT or MOSFET modules). These modules can be customized to fit in different customer design requirements.
The portfolio of protection diodes includes ESD protection and EMI filter. Our thyristors or SCR (silicon-controlled rectifiers) are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules business (IGBT or MOSFET modules).
Vishay inductor innovations include our patented IHLP low-profile, high-current inductor technology with industry-leading specifications. Our low-profile, high-current inductors save circuit board space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusing on high performance and high reliability.
Our low-profile, high-current inductors save circuit board space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusing on high performance and high reliability. Substantially all of our Inductors segment products are non-commodity or custom products.
They are available in various glass and plastic packaging options and generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor) diodes. The portfolio of protection diodes includes ESD protection and EMI filter.
Our wide selection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener). They are available in various glass and plastic packaging options and generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor) diodes.
We are a market leader with a strong technology base, many specialty products, and strong name recognition (such as our IHLP® and HiRel Systems brands). We focus on higher value markets in specialized industries, such as the industrial, automotive, military, and medical end markets. Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage.
We focus on higher value markets in specialized industries, such as the industrial, automotive, military, and medical end markets. Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage. Vishay inductor innovations include our patented IHLP low-profile, high-current inductor technology with industry-leading specifications.
Due to our strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong market position, we have generated positive “free cash” in each of the past 26 years and “free cash” in excess of $80 million in each of the past 21 years.
Due to our strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong market position, we have generated positive “free cash” in each of the past 27 years. Our aggressive capital expenditure plans for 2023 - 2025 have limited and will limit "free cash" generation over that time frame.
Employees at one small U.S. facility, representing less than 1% of our U.S. workforce, are represented by a trade union. We consider our relations with our employees to be good. Our future success is substantially dependent on our ability to attract and retain highly qualified technical and administrative personnel.
Employees at one small U.S. facility, representing less than 1% of our U.S. workforce, are represented by a trade union. We consider our relations with our employees positive, fair, and equitable. Our greatest assets are our employees, and our continued success depends on our ability to attract, retain, and develop high levels of talent across the organization.
Our acquisition of MaxPower Semiconductor, Inc. on October 28, 2022 adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Commodity products generally comprise about 55% to 60% of our annual MOSFETs segment revenues. Non-commodity products generally comprise about 30% to 35% of our annual MOSFETs segment revenues.
Our acquisition of MaxPower Semiconductor, Inc. on October 28, 2022 adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Our pending acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment. In 2023, commodity products comprised 45% of our annual MOSFETs segment revenues.
Our wet tantalum and MicroTan™ technologies are market leaders. Commodity products generally comprise about 30% to 35% of our annual Capacitors segment revenues. Non-commodity products generally comprise about 45% to 50% of our annual Capacitors segment revenues. Custom products generally comprise about 15% to 20% of our annual Capacitors segment revenues.
Our wet tantalum and MicroTan™ technologies are market leaders. In 2023, commodity products comprised 28% of our annual Capacitors segment revenues. Non-commodity products comprised 48% of our annual Capacitors segment revenues. Custom products comprised 24% of our annual Capacitors segment revenues.
Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages. Our wide selection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener).
Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer markets. Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages.
Our Diodes business is a solid business with a strong market presence in both the commodity and non-commodity markets. The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules.
The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules. The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply.
Custom products generally comprise 10% to 15% of our annual MOSFETs segment revenues. Approximately 30% of our annual MOSFETs segment revenues are generated by products that were developed in the previous five years. Diodes Segment Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering.
Diodes Segment Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide electromagnetic interference filtering. Our Diodes business is a solid business with a strong market presence in both the commodity and non-commodity markets.
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We expect the benefits of our restructuring and other cost cutting measures (see “Cost Management” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) to contribute to our “free cash” generation going forward.
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Non-commodity products comprised 42% of our annual MOSFETs segment revenues. Custom products comprised 13% of our annual MOSFETs segment revenues. Approximately 30% of our annual MOSFETs segment revenues were generated by products that were developed in the previous five years.
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Recent Events: COVID-19 Pandemic The COVID-19 pandemic continues to have an adverse global impact, while the widespread economic impact on Vishay was temporary, as evidenced by our revenues since the beginning of 2021.
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These modules can be customized to fit in different customer design requirements. In 2023, commodity products comprised 55% of our annual Diodes segment revenues. Non-commodity products comprised 26% of our annual Diodes segment revenues. Custom products comprised 19% of our annual Diodes segment revenues.
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The negative impacts on Vishay included disruptions in our ability to manufacture products, disruptions in the operations of our customers, and disruptions in shipping, which contributed to higher costs. Similar disruptions have occurred on a more limited scale and may continue to occur.
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In 2023, commodity products comprised 19% of our annual Resistors segment revenues. Non-commodity products comprised 53% of our annual Resistors segment revenues. Custom products comprised 28% of our annual Resistors segment revenues. Approximately 15% of our annual Resistors segment revenues were generated by products that were developed in the previous five years. Inductors Segment Inductors also impede electric current.
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To continue to be successful, we will need to continue to adapt our business and operations for the impacts of the COVID-19 pandemic and potential future coronavirus outbreaks and the mitigation efforts by governments to attempt to control their spread.
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Each person and each role plays a critical role in our success. Vishay continuously invests in its people through diverse training offerings, networking opportunities, and a commitment to developing life and professional skills. Employee development programs offer individual and group learning to maintain profitable business growth while increasing speed and agility.
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The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply. Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer markets.
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Organizationally, Vishay continues to evolve and change to meet or exceed customer and market demands, requiring heightened collaboration and agility. We continue to embed a high-performance culture whereby employees are encouraged to surface ideas, employ continuous improvement attitudes, and work together to achieve our organizational goals.
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Commodity products generally comprise about 55% to 60% of our annual Diodes segment revenues. Non-commodity products generally comprise about 25% to 30% of our annual Diodes segment revenues. Custom products generally comprise about 15% to 20% of our annual Diodes segment revenues.
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Training and communication efforts have been implemented to ensure all employees know what is expected of them. The first phase of implementing a global human capital management system was completed in late 2023 to support our international workforce's communication, development, and efficient business processes.
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Commodity products generally comprise about 20% to 25% of our annual Resistors segment revenues. Non-commodity products generally comprise about 50% to 55% of our annual Resistors segment revenues. Custom products generally comprise about 25% to 30% of our annual Resistors segment revenues.
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During 2023, resources were added to lead the global functions of Talent Acquisition and Total Rewards to refine our focus on attracting and nurturing key talent. Incentive compensation programs have been revised to create a unified focus on profitable growth.
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In order to prepare for the future Vishay introduced ViTal, a talent management program. Every year a diverse cross-cultural, cross-regional and cross-functional group of young individuals is being identified to prepare for higher leadership roles.
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Organizational and structural changes that have allowed us to flatten the organizational structure and redefine some leadership roles continue to be implemented. We empower our employees by pushing down decision-making, and in turn, we speed up decision-making across the organization.
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During 2022, we began the implementation of a global human capital management system, replacing diverse local systems throughout our organization, to manage employee data more effectively and efficiently, allowing us to make better decisions related to our people. To identify and develop future leaders Vishay established a global Vishay Academy.
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Employee development programs focus on offering individual and group learning to maintain profitable business growth while also increasing speed and agility to meet customer demand. Global training and development programs include courses in leadership development, P&L management, business finance for non-finance leaders, distance leadership / global matrix management.
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A robust succession plan for the top 200 positions in the organization and levels below has also been created. A specialist career model also provides development opportunities for technical roles in parallel to management careers. Vishay has accelerated a global continuous improvement program to ensure increase of efficiencies and product quality through employee participation.
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Throughout the COVID-19 pandemic, Vishay continued to deliver training and development courses. To protect our employees, courses were delivered online, including live events for all employees. Communication from executive management has played an important role to regularly inform employees and keep them engaged.
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As part of our executive transition effective January 1, 2023, we have implemented certain organizational and structural changes. As part of this effort, we have flattened the organizational structure and re-defined some leadership roles.
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We are pushing down decision making into the organization to empower our leaders and to facilitate timely action, and are aligning incentive compensation to better correspond to personal and company growth and profitability initiatives.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConsequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks relating to our business Our business may be adversely affected by the widespread outbreak of diseases, including the COVID-19 pandemic, and the mitigation efforts by governments worldwide to control its spread.
Biggest changeOur business may be adversely affected by the widespread outbreak of diseases and the mitigation efforts by governments worldwide to control their spread. We cannot predict when future disease outbreaks or pandemics will occur.
These provisions include: • the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions; • the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each of which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt. 21 In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
These provisions include: • the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions; • the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each of which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt. 22 In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
If these consequences are realized, it could result in a general economic downturn or otherwise have a material adverse effect on our business. 20 Risks related to our capital structure The holders of our Class B common stock have effective voting control of our company, giving them the effective ability to prevent a change in control transaction.
If these consequences are realized, it could result in a general economic downturn or otherwise have a material adverse effect on our business. Risks related to our capital structure The holders of our Class B common stock have effective voting control of our company, giving them the effective ability to prevent a change in control transaction.
The potential risks and effects of the COVID-19 or future pandemics and the related economic impact that could have an adverse effect on our business include, but are not limited to: • Adverse impact on our customers and supply channels; • Decrease in sales, product demand and pricing and unfavorable economic and market conditions; • Increased costs, including higher shipping costs due to reduced shipping capacity; • Restrictions on our manufacturing, support operations or workforce, or similar limitations for our customers, vendors, and suppliers, that could limit our ability to meet customer demand; • Potential increased credit risk if customers, distributors, and resellers are unable to pay us, or must delay paying their obligations to us; • Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures could result in delays; • Impact on our workforce/employees due to the spread of the virus and any shelter-in-place orders; and • Cybersecurity risks as a result of extended periods of remote work arrangements.
The potential risks and effects of future disease outbreaks and the related economic impact that could have an adverse effect on our business include, but are not limited to: • Adverse impact on our customers and supply channels; • Decrease in sales, product demand and pricing and unfavorable economic and market conditions; • Increased costs, including higher shipping costs due to reduced shipping capacity; • Restrictions on our manufacturing, support operations or workforce, or similar limitations for our customers, vendors, and suppliers, that could limit our ability to meet customer demand; • Potential increased credit risk if customers, distributors, and resellers are unable to pay us, or must delay paying their obligations to us; • Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures could result in delays; • Impact on our workforce/employees due to the spread of the virus and any shelter-in-place orders; and • Cybersecurity risks as a result of extended periods of remote work arrangements.
Other unknown and unpredictable factors also could have a material adverse effect on our future financial condition and results of operations. 22
Other unknown and unpredictable factors also could have a material adverse effect on our future financial condition and results of operations. 23
Although we have never experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises, including wars, our financial condition and results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel.
Although we have never experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises, including the current war with Hamas, our financial condition and results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel.
Risks associated with our operations outside the United States We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate. We have substantial operations outside the United States, and approximately 71% of our revenues during 2022 were derived from sales to customers outside the United States.
Risks associated with our operations outside the United States We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate. We have substantial operations outside the United States, and approximately 74% of our revenues during 2023 were derived from sales to customers outside the United States.
Our business has been in operation in Israel for 52 years, where we have substantial manufacturing operations.
Our business has been in operation in Israel for 53 years, where we have substantial manufacturing operations.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 43.5% of the total voting power of our capital stock as of December 31, 2022.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023.
At December 31, 2022, the holders of Class B common stock held approximately 48.5% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders. Mrs.
At December 31, 2023, the holders of Class B common stock held approximately 49.1% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders. Mrs.
If such opportunities were to arise, our Board of Directors may consider the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to authorize the issuance of additional shares. Any such reluctance could impede our ability to complete certain transactions.
If such opportunities were to arise, our Board of Directors may consider the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to authorize the issuance of additional shares.
Our outstanding convertible debt instruments may impact the trading price of our common stock. We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with respect to these instruments.
Any such reluctance could impede our ability to complete certain transactions. 20 Our outstanding convertible debt instruments may impact the trading price of our common stock. We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with respect to these instruments.
Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may impede or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock.
We can provide no assurance as to the financial stability or viability of the option counterparties. Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may impede or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock.
Our credit facility bears interest at variable rates based on LIBOR. A significant increase in LIBOR would significantly increase our interest expense. A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment balances, which are currently greater than our debt balances.
A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment balances, which are currently greater than our debt balances.
U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc. Our U.S. subsidiaries have other operating cash needs.
Our revolving credit facility provides us with additional U.S. liquidity. U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc.
A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs. 15 In the past we have grown through successful integration of acquired businesses, but this may not continue.
A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs. We face significant challenges managing our capacity expansion strategy.
Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant payment obligations. We generate a significant amount of cash and profits from our non-U.S. subsidiaries. We used substantially all of the amounts repatriated from 2018 to 2020 to significantly re-shape the capital structure of the Company.
Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant payment obligations. We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2023, 65.5% of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States.
Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill. Our business is cyclical and future periods of decline and increased demand are not predictable. The electronic component industry is highly cyclical and experiences periods of decline from time to time.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Risks relating to our business Our business is cyclical and future periods of decline and increased demand are not predictable. The electronic component industry is highly cyclical and experiences periods of decline from time to time.
Removed
Although the widespread economic impact of the COVID-19 pandemic on Vishay was temporary, the pandemic continues to adversely affect global business. Impacts have included disruptions in our ability to manufacture products and disruptions in the operations of our customers and modes of shipping.
Added
As part of our strategy to drive growth and increase capacity, we are increasing internal capacity by investing $329 million in 2023 and plan to invest $1.2 billion total from 2023 to 2025 and plan to increase external capacity by outsourcing additional commodity products to subcontractors.
Removed
While we are unable to accurately predict the full extent to which the COVID-19 pandemic and the mitigation efforts by governments to attempt to control its spread will have on our business due to numerous uncertainties, thus far the impacts have resulted in increased costs and a reduction in sales to certain regions and end-markets.
Added
Our capacity expansion plans include building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab , a new power inductor site in Mexico, a resistor manufacturing expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy.
Removed
We cannot predict when the impact of the COVID-19 pandemic will end globally or when future coronavirus outbreaks or pandemics will occur.
Added
Additionally, the planned transaction with Nexperia BV will add a wafer fabrication facility and operations in Newport, South Wales, U.K. There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility. There are demand-related risks associated with all growth initiatives.
Removed
As of December 31, 2022, substantially all of our cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Our revolving credit facility provides us with additional U.S. liquidity.
Added
There are also inherent execution risks in building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase costs and negatively impact our operating results.
Added
The risks include, but are not limited to, the following: • design and construction delays and cost overruns; • issues installing and qualifying new equipment and ramping production; • poor production process yields and reduced quality control; and • insufficient personnel with requisite expertise and experience to operate the facilities.
Added
Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill. 15 In the past we have grown through successful integration of acquired businesses, but this may not continue.
Added
Our credit facility bears interest at variable rates based on Secured Overnight Financing Rate ("SOFR") and other currency-specific reference rates. A significant increase in such reference rates would significantly increase our interest expense.
Added
A U.S.-domiciled subsidiary is expected to be the acquiring entity of Nexperia's wafer fabrication facility and operations in Newport, South Wales, U.K. Our U.S. subsidiaries have other operating cash needs.
Added
Conversion of our outstanding 2025 Notes and 2030 Notes may dilute the ownership interest of our existing stockholders, including holders who had previously converted their notes.
Added
The conversion of some or all of our outstanding 2.25% convertible senior notes due 2025 (the "2025 Notes") or our outstanding 2.25% convertible senior notes due 2030 (the "2030 Notes") may dilute the ownership interests of our existing stockholders.
Added
Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
Added
We may not have the ability to raise the funds necessary to settle conversions of our outstanding 2025 Notes and 2030 Notes in cash or to repurchase the notes upon a fundamental change or on a repurchase date, as applicable, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2025 Notes or 2030 Notes.
Added
Holders of our outstanding 2025 Notes and 2030 Notes have the right to require us to repurchase all or a portion of their 2025 Notes or 2030 Notes, as the case may be, upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2025 Notes or 2030 Notes, as the case may be, to be repurchased, plus accrued and unpaid interest, if any.
Added
In addition, upon conversion of the 2030 Notes, we will be required to make cash payments for each $1,000 in principal amount of 2030 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values as described in the indenture governing the 2030 Notes.
Added
Our outstanding 2025 Notes contain similar provisions concerning the holders’ rights to require us to repurchase their 2025 Notes upon a fundamental change and to pay cash to settle conversions of their 2025 Notes.
Added
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2030 Notes or the 2025 Notes surrendered therefor or notes being converted.
Added
In addition, our ability to repurchase the 2025 Notes or the 2030 Notes or to pay cash upon conversions of the 2025 Notes or 2030 Notes may be limited by law, by regulatory authority or by agreements governing our existing and future indebtedness, as described below.
Added
For example, our credit facility in effect from time to time may prohibit us from making any cash payments on the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, upon a fundamental change repurchase if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with the applicable financial covenants under that facility.
Added
Any new credit facility into which we may enter may have similar restrictions unless certain conditions are met.
Added
Our failure to make cash payments upon the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, as required under the terms of the applicable indenture governing such notes would permit holders of the 2025 Notes or the 2030 Notes, as the case may be, to accelerate our obligations under the 2025 Notes or the 2030 Notes, as the case may be.
Added
Our failure to repurchase the 2025 Notes or 2030 Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on future conversions of the 2025 Notes or the 2030 Notes as required by the applicable indenture would constitute a default under such indenture.
Added
A default under such indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness, including our credit facility.
Added
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof.
Added
The conditional conversion feature of our outstanding 2025 Notes and 2030 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2025 Notes or 2030 Notes is triggered, holders of such notes will be entitled to convert the notes at any time during specified periods at their option.
Added
If one or more holders elect to convert their notes, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity.
Added
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Added
Certain provisions in the indentures governing the 2025 Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us. Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us.
Added
For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash. In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover.
Added
In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable. 21 The capped call transactions may affect the market price of our common stock.
Added
In connection with the pricing of, and the initial purchasers’ exercise in full of their option to purchase additional, 2030 Notes, we entered into capped call transactions with the option counterparties.
Added
The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion of any 2030 Notes and to offset any cash payments made in excess of the principal amount of converted 2030 Notes, as the case may be, with such reduction and/or offset subject to a cap.
Added
In connection with establishing their initial hedges of the capped call transactions, we expect the option counterparties or their respective affiliates to have purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the 2030 Notes.
Added
In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of the 2030 Notes and prior to the maturity of the 2030 Notes (and are likely to do so on each exercise date for the capped call transactions or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the 2030 Notes).
Added
This activity could cause or avoid an increase or decrease in the market price of our common stock. In addition, if any such capped call transactions fail to become effective, the option counterparties or their respective affiliates may unwind their hedge positions with respect to our common stock, which could adversely affect the value of our common stock.
Added
We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of our common stock.
Added
In addition, we do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. We are subject to counterparty risk with respect to the capped call transactions.
Added
The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral.
Added
Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty.
Added
Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock.

Item 2. Properties

Properties — owned and leased real estate

6 edited+1 added−1 removed0 unchanged
Biggest changeOwning many of our manufacturing facilities provides us meaningful financial and operating benefits, including long-term stability and a necessary buffer for economic downturns. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Biggest changeIn the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs. Owning many of our manufacturing facilities provides us meaningful financial and operating benefits, including long-term stability and a necessary buffer for economic downturns.
Vocklabruck, Austria Diodes 100,000 People's Republic of China Tianjin Diodes 397,000 Shanghai Diodes 195,000 Xi'an MOSFETs and Diodes 133,000 Czech Republic Blatna Resistors and Capacitors 276,000 Dolni Rychnov Resistors and Capacitors 183,000 Prachatice Capacitors 92,000 Volary Resistors 35,000 France Nice Resistors 221,000 Chateau Gontier Resistors 82,000 Hyeres Resistors 59,000 Germany Selb Resistors and Capacitors 472,000 Heide Resistors 264,000 Landshut Capacitors 75,000 Fichtelberg Resistors 36,000 Budapest, Hungary Diodes 101,000 Loni, India Resistors and Capacitors 405,000 Israel Dimona Resistors and Capacitors 404,000 Migdal Ha'Emek Capacitors 288,000 Be'er Sheva Resistors, Inductors and Capacitors 276,000 Turin, Italy Diodes 102,000 Miharu, Japan Capacitors 165,000 Melaka, Malaysia Optoelectronic Components 156,000 Juarez, Mexico Resistors 75,000 Famalicao, Portugal Capacitors 222,000 Republic of China (Taiwan) Taipei Diodes 366,000 Kaohsiung MOSFETs 105,000 23 The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows: Leased Locations Business Segment Approx.
Vocklabruck, Austria Diodes 100,000 People's Republic of China Tianjin Diodes 397,000 Shanghai Diodes 195,000 Xi'an MOSFETs and Diodes 133,000 Czech Republic Blatna Resistors and Capacitors 276,000 Dolni Rychnov Resistors and Capacitors 183,000 Prachatice Capacitors 92,000 Volary Resistors 35,000 France Nice Resistors 221,000 Chateau Gontier Resistors 82,000 Hyeres Resistors 59,000 Germany Selb Resistors and Capacitors 472,000 Heide Resistors 264,000 Landshut Capacitors 75,000 Fichtelberg Resistors 36,000 Budapest, Hungary Diodes 101,000 Loni, India Resistors and Capacitors 405,000 Israel Dimona Resistors and Capacitors 404,000 Migdal Ha'Emek Capacitors 288,000 Be'er Sheva Resistors, Inductors and Capacitors 276,000 Turin, Italy Diodes 102,000 Miharu, Japan Capacitors 165,000 Melaka, Malaysia Optoelectronic Components 156,000 Juarez, Mexico Resistors 75,000 Famalicao, Portugal Capacitors 222,000 Republic of China (Taiwan) Taipei Diodes 366,000 Kaohsiung MOSFETs 105,000 25 The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows: Leased Locations Business Segment Approx.
Available Space (Square Feet) United States Attleboro, MA Resistors 100,000 Columbus, NE Resistors 87,000 Ontario, CA Resistors 38,000 Dover, NH Inductors 35,000 East Windsor, CT Resistors 30,000 Hollis, NH Resistors 25,000 Fremont, CA Resistors 18,000 Glendale, WI Resistors 14,000 Montevideo, MN Inductors 11,000 Duluth, MN Inductors 10,000 Non-U.S.
Available Space (Square Feet) United States Columbus, NE Resistors 87,000 Attleboro, MA Resistors 40,000 Ontario, CA Resistors 38,000 Dover, NH Inductors 35,000 East Windsor, CT Resistors 30,000 Hollis, NH Resistors 25,000 Fremont, CA Resistors 18,000 Glendale, WI Resistors 14,000 Hudson, MA Resistors 13,000 Montevideo, MN Inductors 11,000 Duluth, MN Inductors 10,000 Non-U.S.
Klagenfurt, Austria Capacitors 150,000 People’s Republic of China Danshui Capacitors, Inductors, and Resistors 446,000 Shanghai MOSFETs 300,000 Shatian Capacitors and Resistors 218,000 Zhuhai Inductors 179,000 Long Xi Resistors 36,000 Prestice, Czech Republic Capacitors 15,000 Santo Domingo, Dominican Republic Inductors 44,000 Germany Itzehoe MOSFETs 217,000 Heilbronn Diodes and Optoelectronic Components 163,000 Selb Capacitors 47,000 Mumbai, India Diodes 34,000 Mexico Juarez Resistors 314,000 Durango Inductors 134,000 Mexicali Resistors 15,000 Manila, Philippines Optoelectronic Components 149,000 Kaohsiung, Republic of China (Taiwan) Diodes 130,000 24
Klagenfurt, Austria Capacitors 150,000 People’s Republic of China Danshui Capacitors, Inductors, and Resistors 446,000 Shanghai MOSFETs 300,000 Shatian Capacitors and Resistors 218,000 Zhuhai Inductors 179,000 Long Xi Resistors 36,000 Santo Domingo, Dominican Republic Inductors 44,000 Germany Itzehoe MOSFETs 217,000 Heilbronn Diodes and Optoelectronic Components 163,000 Selb Capacitors 47,000 Mumbai, India Diodes 34,000 Mexico Juarez Resistors 314,000 Durango Inductors 200,000 Mexicali Resistors 15,000 Manila, Philippines Optoelectronic Components 149,000 Kaohsiung, Republic of China (Taiwan) Diodes 130,000 26
Item 2. PROPERTIES At December 31, 2022, our business had 57 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for manufacturing activities due to our restructuring activities.
Item 2. PROPERTIES At December 31, 2023, our business had 57 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for manufacturing activities.
The principal locations of our owned manufacturing facilities, along with available space including administrative offices, are as follows: Owned Locations Business Segment Approx. Available Space (Square Feet) United States Columbus, NE Resistors 201,000 Bennington, VT Capacitors 64,000 Yankton, SD Inductors 60,000 Warwick, RI Resistors 56,000 Niagara Falls, NY Resistors 34,000 Marshall, MN Inductors 22,000 Non-U.S.
Available Space (Square Feet) United States Columbus, NE Resistors 201,000 Bennington, VT Capacitors 64,000 Yankton, SD Inductors 60,000 Warwick, RI Resistors 56,000 Niagara Falls, NY Resistors 34,000 Marshall, MN Inductors 22,000 Non-U.S.
Removed
See Note 4 to our consolidated financial statements for further information related to our restructuring efforts, as well as additional information in “Cost Management” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs.
Added
We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. The principal locations of our owned manufacturing facilities, along with available space including administrative offices, are as follows: Owned Locations Business Segment Approx.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

0 edited+6 added−3 removed10 unchanged
Removed
Antitrust Class Action Complaints The complaints that had been filed by The AASI Beneficiaries’ Trust by and through Kenneth A. Welt Liquidating Trustee and Benchmark Electronics, Inc. against certain manufacturers of aluminum, tantalum and film capacitors, including Holy Stone Enterprise Co., Ltd., Milestone Global Technology, Inc. d/b/a/ Holystone International, Holy Stone Holdings Co., Ltd.
Added
VGSI was served in August 2023 with a complaint brought by the Hicksville Water District against multiple defendants. The matter, Hicksville Water District v. Alsy Manufacturing, Inc., is pending in the Supreme Court of the State of New York, County of Nassau.
Removed
(collectively, “Holy Stone”) and Vishay Polytech Co., Ltd., which was acquired by a subsidiary of the Company in 2014 (formerly known as Holy Stone Polytech Co., Ltd.) (“VPC”) have been settled and dismissed with prejudice. Holy Stone paid on behalf of itself and VPC a total of $745,000 for final settlement of those cases.
Added
As with two other previously reported cases pending in the United States District Court for the Eastern District of New York, the newest case contains claims for recovery of response costs under CERCLA, and alleges that a predecessor’s manufacturing operations in the Site, between 1960 and 1993, impacted groundwater beneath and downgradient of the Site.
Removed
VPC admitted no liability and paid nothing toward the settlements. The purported wrongdoing, as described in the complaints, occurred prior to the acquisition of VPC by Vishay. Currently, neither Vishay nor any of its subsidiaries is a party to any antitrust litigation in the U.S. or worldwide.
Added
VGSI is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims. On August 31, 2023, Vishay was notified by the U.S. Environmental Protection Agency ("EPA") of potential violations of the Resource Conservation and Recovery Act and the Solid Waste Disposal Act.
Added
The alleged violations relate to the handling, storage, inspection, and labeling of hazardous waste at Vishay's facility located in Columbus, Nebraska.
Added
Vishay has reached an agreement with the EPA, subject to execution of and finalization of the Consent Agreement, including the filing and ratification of the Consent Agreement, including the filing and ratification of the Consent Agreement by the Regional Hearing Clerk for EPA, Region 7, to settle this matter for a civil penalty of $387,000 and committing to submit quarterly compliance reports to the EPA for one year.
Added
Vishay admits no violation of any law or regulation under the agreement. The Company does not expect the matter or its settlement as proposed to have a material effect on its financial condition or results of operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

3 edited+2 added−2 removed8 unchanged
Biggest changeZandman controls, on a shared basis with Ruta Zandman and Ziv Shoshani, approximately 34.5% of the total voting power of our capital stock as of December 31, 2022. He also is non-executive Chairman of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010.
Biggest changeZandman controls, on a shared basis with Ruta Zandman and Ziv Shoshani, approximately 35.0% of the total voting power of our capital stock as of December 31, 2023. He also serves on the Board of Directors of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010 (including as non-executive Chair from 2010 - 2022).
Item 4. MINE SAFETY DISCLOSURES None. 25 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers as of February 22, 2023: Name Age Positions Held Marc Zandman* 61 Executive Chairman of the Board, Chief Business Development Officer, and President, Vishay Israel Ltd.
Item 4. MINE SAFETY DISCLOSURES None. 27 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers as of February 16, 2024: Name Age Positions Held Marc Zandman* 62 Executive Chairman of the Board, Chief Business Development Officer, and President, Vishay Israel Ltd.
Joel Smejkal* 56 Chief Executive Officer, President, and Director Lori Lipcaman 65 Executive Vice President and Chief Financial Officer Jeff Webster 52 Executive Vice President - Chief Operating Officer Roy Shoshani 49 Executive Vice President - Chief Technical Officer Peter Henrici 67 Executive Vice President - Corporate Development Andreas Randebrock 58 Executive Vice President Global Human Resources * Member of the Executive Committee of the Board of Directors.
Joel Smejkal* 57 Chief Executive Officer, President, and Director Lori Lipcaman 66 Executive Vice President and Chief Financial Officer Jeff Webster 53 Executive Vice President - Chief Operating Officer Roy Shoshani 50 Executive Vice President - Chief Technical Officer Peter Henrici 68 Executive Vice President - Corporate Development Michael O'Sullivan 49 Executive Vice President - Chief Administrative and Legal Officer * Member of the Executive Committee of the Board of Directors.
Removed
Andreas Randebrock was appointed Executive Vice President Global Human Resources effective July 1, 2020. Mr. Randebrock has been working for Vishay since 2015 as Senior Vice President Employee Development. Before Mr. Randebrock joined Vishay he worked as a management consultant in the field of leadership, human resources, and organizational consulting for more than 20 years. From 1998 until 2015, Mr.
Added
Michael O'Sullivan was appointed Executive Vice President - Chief Administrative and Legal Officer effective January 1, 2024. Mr. O’Sullivan previously served as Corporate General Counsel since joining the Company in 2012. In July 2016, Mr. O'Sullivan was appointed Regional Country Manager - The Americas. Prior to joining Vishay, Mr.
Removed
Randebrock was employed by the global human resources consultancy Hay Group (acquired in 2015 by Korn Ferry) where he held various positions of increasing responsibility and was a partner. 26 PART II
Added
O'Sullivan worked as an in-house corporate attorney for a subsidiary of Koch Industries, Inc., and in private practice at DLA Piper. 28 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+2 added−1 removed7 unchanged
Biggest changeCommon stock price range Dividends declared 2022 2021 per share High Low High Low 2022 2021 Fourth quarter $ 23.39 $ 17.63 $ 22.65 $ 19.00 $ 0.100 $ 0.100 Third quarter $ 21.58 $ 16.73 $ 22.93 $ 19.67 $ 0.100 $ 0.095 Second quarter $ 20.91 $ 17.13 $ 26.50 $ 21.09 $ 0.100 $ 0.095 First quarter $ 22.71 $ 17.58 $ 25.26 $ 20.56 $ 0.100 $ 0.095 At February 17, 2023, we had outstanding 12,097,148 shares of Class B common stock, par value $.10 per share, each of which entitles the holder to ten votes.
Biggest changeCommon stock price range Dividends declared 2023 2022 per share High Low High Low 2023 2022 Fourth quarter $ 25.22 $ 21.15 $ 23.39 $ 17.63 $ 0.10 $ 0.10 Third quarter $ 30.10 $ 24.03 $ 21.58 $ 16.73 $ 0.10 $ 0.10 Second quarter $ 29.66 $ 20.57 $ 20.91 $ 17.13 $ 0.10 $ 0.10 First quarter $ 24.48 $ 20.51 $ 22.71 $ 17.58 $ 0.10 $ 0.10 At February 14, 2024, we had outstanding 12,097,148 shares of Class B common stock, par value $.10 per share, each of which entitles the holder to ten votes.
See "Financial Condition, Liquidity, and Capital Resources" included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." On February 7, 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.
See "Financial Condition, Liquidity, and Capital Resources" included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.
The following table sets forth the high and low sales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled approximately 1,000 at February 17, 2023.
The following table sets forth the high and low sales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled approximately 1,000 at February 14, 2024.
The line graph assumes that $100 had been invested at December 31, 2017 and assumes that all dividends were reinvested.
The line graph assumes that $100 had been invested at December 31, 2018 and assumes that all dividends were reinvested.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 43.5% of the total voting power of our capital stock as of December 31, 2022.
Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023.
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share (including commission) Total Number of Shares Purchased as Part of Publicly Announced Program Total Dollar Amount Purchased Under the Program Maximum Number of Shares that May Yet Be Purchased Under the Program October 2 - October 29 472,324 $ 19.34 472,324 $ 9,134,132 4,549,338 October 30 - November 26 385,274 21.82 385,274 8,406,284 4,164,064 November 27 - December 31 491,371 21.90 491,371 10,760,263 3,672,693 Total 1,348,969 $ 20.98 1,348,969 $ 28,300,679 3,672,693 27 Stock Performance Graph The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index.
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share (including commission) Total Number of Shares Purchased as Part of Publicly Announced Program Total Dollar Amount Purchased Under the Program Maximum Number of Shares that May Yet Be Purchased Under the Program October 1 - October 28 254,985 $ 23.92 254,985 $ 6,099,333 1,023,839 October 29 - November 25 309,914 22.63 309,914 7,013,513 713,925 November 26 - December 31 336,540 23.50 336,540 7,910,080 2,877,385 Total 901,439 $ 23.32 901,439 $ 21,022,926 2,877,385 29 Stock Performance Graph The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index.
We paid $57.2 million of dividends to stockholders and repurchased $83.0 million of our stock pursuant to the Stockholder Return Policy in 2022.
We paid $55.6 million of dividends to stockholders and repurchased $78.7 million of our stock pursuant to the Stockholder Return Policy in 2023. To enable the operation of the Stockholder Return Policy, Vishay's Board of Directors approves the repurchase of a stated number of shares of common stock from time-to-time.
Removed
Base Years Ending December 31, Period Company Name / Index 2017 2018 2019 2020 2021 2022 Vishay Intertechnology, Inc. 100 88.11 106.31 105.76 113.65 114.41 S&P 500 Index 100 95.62 125.72 148.85 191.58 156.88 S&P MidCap 400 Index 100 88.92 112.21 127.54 159.12 138.34 Philadelphia Semiconductor Index 100 93.95 153.39 235.71 336.71 219.26
Added
As of September 30, 2023, approximately 1.3 million shares remained from the previous repurchase authorization of 6.0 million shares. On November 28, 2023, Vishay's Board of Directors approved the repurchase of an additional 2.5 million shares of common stock, to enable the operation of the Stockholder Return Policy for the foreseeable future.
Added
Base Years Ending December 31, Period Company Name / Index 2018 2019 2020 2021 2022 2023 Vishay Intertechnology, Inc. 100 120.66 120.03 128.98 129.84 146.67 S&P 500 Index 100 131.49 155.68 200.37 164.08 207.21 S&P MidCap 400 Index 100 126.20 143.44 178.95 155.58 181.15 Philadelphia Semiconductor Index 100 163.26 250.87 358.37 233.37 389.74

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+59 added−39 removed85 unchanged
Biggest changeThe book-to-bill ratio in the fourth fiscal quarter of 2022 increased to 0.94 versus 0.88 in the third fiscal quarter of 2022. 33 Financial Metrics by Segment The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters beginning with the fourth fiscal quarter of 2021 through the fourth fiscal quarter of 2022 (dollars in thousands) : 4th Quarter 2021 1st Quarter 2022 2nd Quarter 2022 3rd Quarter 2022 4th Quarter 2022 MOSFETs Net revenues $ 171,339 $ 172,674 $ 158,395 $ 225,186 $ 206,005 Book-to-bill ratio 1.01 1.28 1.14 0.78 1.15 Gross profit margin 30.1 % 34.0 % 35.0 % 36.9 % 37.5 % Segment operating margin 23.5 % 28.1 % 28.2 % 31.9 % 30.9 % Diodes Net revenues $ 192,117 $ 182,334 $ 192,083 $ 209,012 $ 181,791 Book-to-bill ratio 1.10 1.16 1.10 0.79 0.88 Gross profit margin 23.7 % 25.1 % 27.8 % 27.0 % 23.4 % Segment operating margin 20.6 % 22.2 % 25.3 % 24.6 % 19.9 % Optoelectronic Components Net revenues $ 78,398 $ 81,016 $ 77,936 $ 73,447 $ 63,985 Book-to-bill ratio 1.22 0.78 0.86 0.57 0.78 Gross profit margin 34.2 % 40.0 % 33.9 % 35.3 % 28.1 % Segment operating margin 27.2 % 34.8 % 28.7 % 30.0 % 20.1 % Resistors Net revenues $ 190,041 $ 207,032 $ 213,176 $ 207,437 $ 205,161 Book-to-bill ratio 1.14 1.24 1.05 1.08 0.85 Gross profit margin 28.5 % 31.4 % 33.1 % 33.0 % 28.3 % Segment operating margin 25.6 % 28.1 % 29.9 % 29.7 % 25.3 % Inductors Net revenues $ 81,825 $ 82,777 $ 89,608 $ 83,503 $ 75,198 Book-to-bill ratio 1.13 1.14 0.97 1.02 0.83 Gross profit margin 29.4 % 30.0 % 33.1 % 30.8 % 32.1 % Segment operating margin 26.4 % 26.8 % 30.0 % 27.0 % 28.9 % Capacitors Net revenues $ 129,352 $ 127,960 $ 132,314 $ 126,213 $ 123,158 Book-to-bill ratio 1.04 1.02 1.17 0.95 0.99 Gross profit margin 21.6 % 25.2 % 24.5 % 23.7 % 23.7 % Segment operating margin 17.7 % 21.4 % 20.9 % 20.1 % 19.9 % _________ 34 Stockholder Value We are focused on enhancing stockholder value by growing our business and improving earnings per share.
Biggest changeThe book-to-bill ratio in the fourth fiscal quarter of 2023 increased to 0.75 versus 0.63 in the third fiscal quarter of 2023. 37 Financial Metrics by Segment The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023 (dollars in thousands) : 4th Quarter 2022 1st Quarter 2023 2nd Quarter 2023 3rd Quarter 2023 4th Quarter 2023 MOSFETs Net revenues $ 206,005 $ 198,181 $ 207,388 $ 205,027 $ 168,158 Book-to-bill ratio 1.15 0.95 0.68 0.50 0.62 Gross profit margin 37.5 % 36.8 % 34.7 % 33.5 % 27.3 % Segment operating margin 30.9 % 29.3 % 27.4 % 25.7 % 16.8 % Diodes Net revenues $ 181,791 $ 175,693 $ 174,735 $ 176,788 $ 163,324 Book-to-bill ratio 0.88 0.71 0.54 0.58 0.61 Gross profit margin 23.4 % 27.4 % 23.4 % 26.7 % 24.1 % Segment operating margin 19.9 % 24.3 % 20.1 % 23.5 % 20.9 % Optoelectronic Components Net revenues $ 63,985 $ 60,403 $ 64,449 $ 64,441 $ 53,853 Book-to-bill ratio 0.78 0.72 0.70 0.57 0.59 Gross profit margin 28.1 % 36.3 % 24.2 % 28.1 % 12.1 % Segment operating margin 20.1 % 28.6 % 16.7 % 20.3 % 3.4 % Resistors Net revenues $ 205,161 $ 223,140 $ 222,433 $ 199,877 $ 198,022 Book-to-bill ratio 0.85 0.88 0.74 0.65 0.82 Gross profit margin 28.3 % 33.2 % 29.1 % 24.6 % 25.6 % Segment operating margin 25.3 % 29.9 % 25.8 % 20.9 % 22.0 % Inductors Net revenues $ 75,198 $ 80,338 $ 89,239 $ 89,947 $ 87,868 Book-to-bill ratio 0.83 1.04 0.84 0.85 0.91 Gross profit margin 32.1 % 29.5 % 34.5 % 31.7 % 33.4 % Segment operating margin 28.9 % 26.1 % 30.9 % 27.9 % 29.6 % Capacitors Net revenues $ 123,158 $ 133,291 $ 133,866 $ 117,573 $ 114,011 Book-to-bill ratio 0.99 0.70 0.70 0.75 0.95 Gross profit margin 23.7 % 28.5 % 25.1 % 22.1 % 25.3 % Segment operating margin 19.9 % 24.8 % 21.0 % 17.5 % 20.4 % _________ 38 Acquisition Activity As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components.
These key financial measures and metrics include net revenues, gross profit margin, operating margin, segment operating income, end-of-period backlog, and the book-to-bill ratio. We also monitor changes in our inventory turnover and our or publicly available average selling prices (“ASP”). Gross profit margin is computed as gross profit as a percentage of net revenues.
These key financial measures and metrics include net revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, and the book-to-bill ratio. We also monitor changes in our inventory turnover and our or publicly available average selling prices (“ASP”). Gross profit margin is computed as gross profit as a percentage of net revenues.
The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries.
The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain subsidiaries; and are guaranteed by certain significant subsidiaries.
We do not anticipate any material restructuring activities in 2023. However, a worsening business environment for the electronics industry or a significant economic downturn may require us to implement additional restructuring initiatives. In uncertain times, we focus on managing our production capacities in accordance with customer requirements, and maintain discipline in terms of our fixed costs and capital expenditures.
We do not anticipate any material restructuring activities in 2024. However, a worsening business environment for the electronics industry or a significant economic downturn may require us to implement additional restructuring initiatives. In uncertain times, we focus on managing our production capacities in accordance with customer requirements, and maintain discipline in terms of our fixed costs and capital expenditures.
We have not incurred any material plant closure or employee termination costs related to any of the businesses acquired since 2011, but we expect to have some level of future restructuring expenses due to acquisitions. 37 Foreign Currency Translation We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries.
We have not incurred any material plant closure or employee termination costs related to any of the businesses acquired since 2011, but we expect to have some level of future restructuring expenses due to acquisitions. 40 Foreign Currency Translation We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries.
In addition to enhancing stockholder value through growing our business, on February 7, 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. See further discussion in “Stockholder Return Policy” below.
In addition to enhancing stockholder value through growing our business, in 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. See further discussion in “Stockholder Return Policy” below.
We will continue to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions. We have paid dividends each quarter since the first quarter of 2014, and t he Stockholder Return Policy will remain in effect until such time as the Board votes to amend or rescind the policy.
We will continue to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions. We have paid dividends each quarter since the first quarter of 2014, and the Stockholder Return Policy will remain in effect until such time as the Board votes to amend or rescind the policy.
See Note 2 to our consolidated financial statements. 36 Cost Management We place a strong emphasis on controlling our costs, and use various measures and metrics to evaluate our cost structure. We define variable costs as expenses that vary with respect to quantity produced. Fixed costs do not vary with respect to quantity produced over the relevant time period.
See Note 2 to our consolidated financial statements. 39 Cost Management We place a strong emphasis on controlling our costs, and use various measures and metrics to evaluate our cost structure. We define variable costs as expenses that vary with respect to quantity produced. Fixed costs do not vary with respect to quantity produced over the relevant time period.
In addition, changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the fair value of the reporting unit and the amount of the goodwill impairment charge. 39 Pension and Other Postretirement Benefits Our defined benefit plans are concentrated in the United States, Germany, and the Republic of China (Taiwan).
In addition, changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the fair value of the reporting unit and the amount of the goodwill impairment charge. 42 Pension and Other Postretirement Benefits Our defined benefit plans are concentrated in the United States, Germany, and the Republic of China (Taiwan).
Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of deferred financing costs. Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our convertible notes are based on the amounts outstanding as of December 31, 2022.
Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of deferred financing costs. Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our convertible notes are based on the amounts outstanding as of December 31, 2023.
However, if economic conditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated statements of operations and on the consolidated balance sheet. 40 Income Taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
However, if economic conditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated statements of operations and on the consolidated balance sheet. 43 Income Taxes We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us. 32 The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business.
Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to governing market conditions and is independently set by us. 36 The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business.
See Item 7A for additional discussion of foreign currency exchange risk. 38 Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates.
See Item 7A for additional discussion of foreign currency exchange risk. 41 Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates.
We have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 3-4 years and allow us to balance our in-house and foundry wafer supply.
We have begun building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 2-3 years and allow us to balance our in-house and foundry wafer supply.
As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). 52 The interest rates on our short-term investments vary by location.
As these investments were funded using a portion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt). 54 The interest rates on our short-term investments vary by location.
We intend to finance the principal amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date. 53 In evaluating our liquidity and capital resources, we consider our outstanding commitments.
We intend to finance the principal amount of any converted notes using borrowings under our credit facility. No conversions have occurred to date. 56 In evaluating our liquidity and capital resources, we consider our outstanding commitments.
The dollar was stronger during 2022 versus 2021, but weaker during 2021 versus 2020, with the translation of foreign currency revenues and expenses into U.S. dollars decreasing reported revenues and expenses in 2022 versus 2021, but increasing reported revenues and expenses in 2021 versus 2020. Foreign Subsidiaries which use the U.S.
The dollar was weaker during 2023 versus 2022, but stronger during 2022 versus 2021, with the translation of foreign currency revenues and expenses into U.S. dollars increasing reported revenues and expenses in 2023 versus 2022, but decreasing reported revenues and expenses in 2022 versus 2021. Foreign Subsidiaries which use the U.S.
See additional information regarding our competitive strengths and key challenges as disclosed in Part 1. 29 We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business.
See additional information regarding our competitive strengths and key challenges as disclosed in Part I. 31 We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future direction of our business.
Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2022. We include the current portion of the long-term liabilities in the table above.
Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2023. We include the current portion of the long-term liabilities in the table above.
At December 31, 2022, our U.S. plans include various non-qualified plans. The table below summarizes information about our pension and other postretirement benefit plans.
At December 31, 2023, our U.S. plans include various non-qualified plans. The table below summarizes information about our pension and other postretirement benefit plans.
Our consolidated balance sheet at December 31, 2022 includes liabilities associated with uncertain tax positions in multiple taxing jurisdictions where we conduct business.
Our consolidated balance sheet at December 31, 2023 includes liabilities associated with uncertain tax positions in multiple taxing jurisdictions where we conduct business.
Additional information about income taxes is included in Note 5 to our consolidated financial statements. 51 Financial Condition, Liquidity, and Capital Resources Our financial condition as of December 31, 2022 continued to be strong. Cash and short-term investments exceed our long-term debt balances, and we have historically been a strong generator of operating cash flows.
Additional information about income taxes is included in Note 5 to our consolidated financial statements. 53 Financial Condition, Liquidity, and Capital Resources Our financial condition as of December 31, 2023 continued to be strong. Cash and short-term investments exceed our long-term debt balances, and we have historically been a strong generator of operating cash flows.
Additionally, interest commitments for our revolving credit facility are based on the rate prevailing at December 31, 2022, but actual rates are variable and are certain to change over time. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years.
Additionally, interest commitments for our revolving credit facility are based on the rate prevailing at December 31, 2023, but actual rates are variable and are certain to change over time. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years through 2025.
For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 4, 5, 6, 11, and 13 to our consolidated financial statements. 54
For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 2, 4, 5, 6, 11, and 13 to our consolidated financial statements. 57
We are focused on enhancing stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while at the same time maintaining a prudent capital structure.
We are focused on enhancing stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by opportunistic acquisitions, while maintaining a prudent capital structure.
Net earnings attributable to Vishay stockholders for the years ended December 31, 2022, 2021, and 2020 include items affecting comparability.
Net earnings attributable to Vishay stockholders for the years ended December 31, 2023, 2022, and 2021 include items affecting comparability.
Inventories are also adjusted for estimated obsolescence and written down to net realizable value based upon estimates of future demand, technology developments and market conditions. Goodwill See Note 1 to our consolidated financial statements for a description of our goodwill impairment tests.
Inventories are also adjusted for estimated obsolescence and written down to net realizable value based on age of the inventory and upon estimates of future demand, technology developments, and market conditions. Goodwill See Note 1 to our consolidated financial statements for a description of our goodwill impairment tests.
These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize.
These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize, such as MaxPower Semiconductor, Inc.
The financial maintenance covenants include (a) an interest coverage ratio of not less than 2.00 to 1; and (b) a leverage ratio of not more than 3.25 to 1 (and a pro forma ratio of 3.00 to 1 on the date of incurrence of additional debt).
Pursuant to the credit facility, the financial maintenance covenants include (a) an interest coverage ratio of not less than 2.00 to 1; and (b) a net leverage ratio of not more than 3.25 to 1 (and a pro forma ratio of 3.00 to 1 on the date of incurrence of additional debt).
The cost of products sold and selling, general, and administrative expense for the year ended December 31, 2022 have been favorably impacted compared to 2021 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency, while the cost of products sold and selling, general, and administrative expense for the year ended December 31, 2021 were unfavorably impacted compared to 2020 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency.
The cost of products sold and selling, general, and administrative expense have been favorably impacted for the year ended December 31, 2023 compared to 2022 and for the year ended December 31, 2022 compared to 2021 by local currency transactions of subsidiaries which use the U.S. dollar as their functional currency.
Accordingly, the capitalized deferred financing costs associated with our convertible notes are excluded from the calculation of long-term debt commitments in the table above. Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our revolving credit facility, which expires on June 4, 2024.
Accordingly, the capitalized deferred financing costs associated with our convertible notes are excluded from the calculation of long-term debt commitments in the table above. Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our revolving credit facility, which expires on May 8, 2028.
These procedures require the exercise of significant judgments. We believe that we have a reasonable basis to estimate future credits under the programs. See Notes 1 and 9 to our consolidated financial statements for further information. Inventories We value our inventories at the lower of cost or net realizable value, with cost determined under the first-in, first-out method.
We believe that we have a reasonable basis to estimate future credits under the programs. See Notes 1 and 9 to our consolidated financial statements for further information. Inventories We value our inventories at the lower of cost or net realizable value, with cost determined under the first-in, first-out method.
The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Germany (2017 through 2021), India (2004 through 2020), and Italy (2017 through 2019). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination.
The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination.
On February 7, 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. See “Stockholder Value” above for additional information.
In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. See “Stockholder Return Policy” above for additional information.
We expect our business to continue to be a reliable generator of free cash. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens.
There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment worsens.
Net earnings attributable to Vishay stockholders for the year ended December 31, 2022 were $428.8 million, or $2.98 per diluted share, compared to $298.0 million, or $2.05 per diluted share, and $122.9 million, or $0.85 per share, for the years ended December 31, 2021 and 2020, respectively.
Net earnings attributable to Vishay stockholders for the year ended December 31, 2023 were $323.8 million, or $2.31 per diluted share, compared to $428.8 million, or $2.98 per diluted share, and $298.0 million, or $2.05 per share, for the years ended December 31, 2022 and 2021, respectively.
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany. 45 Resistors Net revenues of the Resistors segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 832,806 $ 752,554 $ 606,183 Change versus comparable prior year period $ 80,252 $ 146,371 Percentage change versus comparable prior year period 10.7 % 24.1 % Changes in Resistors segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Increase in volume 10.4 % 18.2 % Increase in average selling prices 4.6 % 0.3 % Foreign currency effects (5.6 )% 2.0 % Acquisitions 1.5 % 3.0 % Other (0.2 )% 0.6 % Net change 10.7 % 24.1 % Gross profit margins and segment operating margins for the Resistors segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 31.5 % 28.7 % 25.3 % Segment operating margin 28.2 % 25.4 % 21.6 % Net revenues of the Resistors segment increased significantly versus the prior year.
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany. 48 Resistors Net revenues of the Resistors segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 843,472 $ 832,806 $ 752,554 Change versus comparable prior year period $ 10,666 $ 80,252 Percentage change versus comparable prior year period 1.3 % 10.7 % Changes in Resistors segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (1.4 )% 10.4 % Increase in average selling prices 1.8 % 4.6 % Foreign currency effects 1.0 % (5.6 )% Acquisitions 0.0 % 1.5 % Other (0.1 )% (0.2 )% Net change 1.3 % 10.7 % Gross profit margins and segment operating margins for the Resistors segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 28.3 % 31.5 % 28.7 % Segment operating margin 24.8 % 28.2 % 25.4 % Net revenues of the Resistors segment increased slightly versus the prior year.
MOSFETs Net revenues of the MOSFETs segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 762,260 $ 667,998 $ 501,380 Change versus comparable prior year period $ 94,262 $ 166,618 Percentage change versus comparable prior year period 14.1 % 33.2 % Changes in MOSFETs segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Increase in volume 4.1 % 33.1 % Change in average selling prices 11.8 % (0.3 )% Foreign currency effects (2.4 )% 0.6 % Acquisition 0.1 % 0.0 % Other 0.5 % (0.2 )% Net change 14.1 % 33.2 % Gross profit margins and segment operating margins for the MOSFETs segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 36.0 % 28.4 % 22.8 % Segment operating margin 30.0 % 22.3 % 15.3 % The MOSFETs segment net revenues increased significantly in 2022 versus the prior year.
MOSFETs Net revenues of the MOSFETs segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 778,754 $ 762,260 $ 667,998 Change versus comparable prior year period $ 16,494 $ 94,262 Percentage change versus comparable prior year period 2.2 % 14.1 % Changes in MOSFETs segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (1.8 )% 4.1 % Increase in average selling prices 2.3 % 11.8 % Foreign currency effects 0.5 % (2.4 )% Acquisition 1.0 % 0.1 % Other 0.2 % 0.5 % Net change 2.2 % 14.1 % Gross profit margins and segment operating margins for the MOSFETs segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 33.3 % 36.0 % 28.4 % Segment operating margin 25.1 % 30.0 % 22.3 % Net revenues of the MOSFETs segment increased slightly in 2023 versus the prior year.
The change in this indefinite reinvestment assertion will provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but will also increase our effective tax rate. The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders.
The changes in these indefinite reinvestment assertions will provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but also increased our effective tax rate. The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders.
The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming our pro forma leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma leverage ratio is greater than 2.50 to 1.00), and requires us to comply with other covenants, including the maintenance of specific financial ratios.
The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00).
We had no amounts outstanding on our revolving credit facility at December 31, 2021 and $42 million outstanding at December 31, 2022. We borrowed $759 million and repaid $717 million on the revolving credit facility during the year ended December 31, 2022.
We had $42 million outstanding on our revolving credit facility at December 31, 2022 and no amounts outstanding at December 31, 2023. We borrowed $501 million and repaid $543 million on the revolving credit facility during the year ended December 31, 2023.
Sales to the Americas and Asia regions increased, while sales to the Europe region decreased slightly. The increase is primarily due to increased sales to EMS customers and the industrial end market, partially offset by decreased sales to the automotive end market. The gross profit margin increased versus the prior year.
The increase is primarily due to increased sales to EMS customers, medical, automotive, and military and aerospace end market customers, and customers in the Americas and Europe regions, partially offset by decreased sales to distribution customers, industrial and telecommunications end market customers, and customers in the Asia region. The gross profit margin increased versus the prior year.
Related to the transaction, we may also be required to make certain contingent payments of up to $57.5 million, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. MaxPower is included in our MOSFETs segment.
The transaction also included possible contingent payments of up to $57.5 million, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate.
Accordingly, we have classified the amount recorded as a current liability as payable within one year, and the remaining uncertain tax positions are classified as payments due thereafter, although actual timing of payments may be sooner. Expected pension and postretirement plan funding is based on a projected schedule of benefit payments under the plans.
Accordingly, we have classified all non-current uncertain tax positions as payments due thereafter, although actual timing of payments may be sooner. Expected pension and postretirement plan funding is based on a projected schedule of benefit payments under the plans.
We continue to broaden our business with targeted acquisitions of specialty resistors businesses. 46 Inductors Net revenues of the Inductors segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 331,086 $ 335,638 $ 293,629 Change versus comparable prior year period $ (4,552 ) $ 42,009 Percentage change versus comparable prior year period (1.4 )% 14.3 % Changes in Inductors segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Change in volume (0.8 )% 15.4 % Change in average selling prices 1.2 % (1.3 )% Foreign currency effects (1.8 )% 0.6 % Other 0.0 % (0.4 )% Net change (1.4 )% 14.3 % Gross profit margins and segment operating margins for the Inductors segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 31.5 % 32.0 % 31.5 % Segment operating margin 28.2 % 29.0 % 28.1 % Net revenues of the Inductors segment decreased slightly versus the prior year.
We continue to broaden our business with targeted acquisitions of specialty resistors businesses. 49 Inductors Net revenues of the Inductors segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 347,392 $ 331,086 $ 335,638 Change versus comparable prior year period $ 16,306 $ (4,552 ) Percentage change versus comparable prior year period 4.9 % (1.4 )% Changes in Inductors segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume 2.4 % (0.8 )% Increase in average selling prices 1.9 % 1.2 % Foreign currency effects 0.5 % (1.8 )% Other 0.1 % 0.0 % Net change 4.9 % (1.4 )% Gross profit margins and segment operating margins for the Inductors segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 32.4 % 31.5 % 32.0 % Segment operating margin 28.7 % 28.2 % 29.0 % Net revenues of the Inductors segment increased moderately versus the prior year.
Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands): Years ended December 31, 2022 2021 2020 MOSFETS $ 274,498 $ 189,959 $ 114,236 Diodes 198,105 168,365 90,004 Optoelectronic Components 102,787 100,737 66,502 Resistors 262,072 215,853 153,214 Inductors 104,349 107,358 92,500 Capacitors 123,839 105,641 70,010 Unallocated gross profit (loss) (6,661 ) - (4,563 ) Gross profit $ 1,058,989 $ 887,913 $ 581,903 Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated statements of cash flows prepared in accordance with GAAP.
Direct costs of the COVID-19 pandemic are not allocated to the segments as the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands) : Years ended December 31, 2023 2022 2021 MOSFETS $ 259,386 $ 274,498 $ 189,959 Diodes 175,621 198,105 168,365 Optoelectronic Components 62,226 102,787 100,737 Resistors 238,428 262,072 215,853 Inductors 112,414 104,349 107,358 Capacitors 126,418 123,839 105,641 Unallocated gross profit (loss) - (6,661 ) - Gross profit $ 974,493 $ 1,058,989 $ 887,913 Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated statements of cash flows prepared in accordance with GAAP.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Years ended December 31, 2022 2021 Change Foreign exchange gain (loss) $ 5,690 $ (2,692 ) $ 8,382 Interest income 7,560 1,269 6,291 Other components of net periodic pension expense (11,090 ) (13,206 ) 2,116 Investment income (loss) (6,812 ) (1,036 ) (5,776 ) Other (200 ) 11 (211 ) $ (4,852 ) $ (15,654 ) $ 10,802 2021 Compared to 2020 Interest expense for the year ended December 31, 2021 decreased by $ 14.0 million versus the year ended December 31, 2020.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands): Years ended December 31, 2022 2021 Change Foreign exchange gain (loss) $ 5,690 $ (2,692 ) $ 8,382 Interest income 7,560 1,269 6,291 Other components of net periodic pension expense (11,090 ) (13,206 ) 2,116 Investment income (loss) (6,812 ) (1,036 ) (5,776 ) Other (200 ) 11 (211 ) $ (4,852 ) $ (15,654 ) $ 10,802 52 Income Taxes For the years ended December 31, 2023, 2022, and 2021, the effective tax rates were 30.4%, 27.5%, and 31.2%, respectively.
The increase is due to increased sales volume, increased average selling prices, and positive impact of product mix, partially offset by increased materials, metals, and labor costs and manufacturing inefficiencies. Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit.
The increase is due to increased average selling prices, positive impact of product mix, positive foreign currency impacts, and lower metals, freight, and utility costs, partially offset by lower sales volume and higher labor and tantalum costs. Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit.
The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $48.9 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $124.0 million during the year ended December 31, 2022.
The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $93.3 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $185 million during the year ended December 31, 2023.
We maintain long-term foundry arrangements with subcontractors to ensure access to external front-end capacity for our semiconductor products. The purchase commitments in the table above represent the estimated minimum commitments for silicon wafers under these arrangements. Our actual purchases in future periods are expected to be greater than these minimum commitments.
We maintain long-term arrangements with subcontractors, suppliers, and other business partners to ensure access to external capacity and supplies for certain products. The purchase commitments in the table above represent the estimated minimum commitments under these arrangements. Our actual purchases in future periods are expected to be greater than these minimum commitments.
Our business and operating results have been, and will continue to be, impacted by worldwide economic conditions. Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets.
Our revenues are dependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets.
The items affecting comparability are (in thousands, except per share amounts) : Years ended December 31, 2022 2021 2020 GAAP net earnings attributable to Vishay stockholders $ 428,810 $ 297,970 $ 122,923 Reconciling items affecting gross profit: Impact of COVID-19 pandemic 6,661 - 4,563 Other reconciling items affecting operating income: Impact of COVID-19 pandemic 546 - (1,451 ) Restructuring and severance costs - - 743 Reconciling items affecting other income (expense): Loss on early extinguishment of debt - - 8,073 Reconciling items affecting tax expense (benefit): Effects of changes in uncertain tax positions $ (5,941 ) $ - $ 3,751 Effects of changes in valuation allowances (33,669 ) (5,714 ) - Effect of change in indefinite reversal assertion 59,642 - - Change in tax laws and regulations - 45,040 - Change in deferred taxes due to early extinguishment of debt - - (1,563 ) Effects of cash repatriation program - - (190 ) Tax effects of pre-tax items above (1,802 ) - (2,799 ) Adjusted net earnings $ 454,247 $ 337,296 $ 134,050 Adjusted weighted average diluted shares outstanding 143,915 145,495 145,228 Adjusted earnings per diluted share $ 3.16 $ 2.32 $ 0.92 30 The following table reconciles gross profit by segment to consolidated gross profit.
The items affecting comparability are (in thousands, except per share amounts) : Years ended December 31, 2023 2022 2021 GAAP net earnings attributable to Vishay stockholders $ 323,820 $ 428,810 $ 297,970 Reconciling items affecting gross profit: Impact of COVID-19 pandemic $ - $ 6,661 $ - Other reconciling items affecting operating income: Impact of COVID-19 pandemic $ - $ 546 $ - Reconciling items affecting other income (expense): Loss on early extinguishment of debt $ 18,874 $ - $ - Reconciling items affecting tax expense (benefit): Effects of changes in uncertain tax positions $ - $ (5,941 ) $ - Effects of changes in valuation allowances - (33,669 ) (5,714 ) Effect of change in indefinite reversal assertion - 59,642 - Change in tax laws and regulations - - 45,040 Tax effects of pre-tax items above (498 ) (1,802 ) - Adjusted net earnings $ 342,196 $ 454,247 $ 337,296 Adjusted weighted average diluted shares outstanding 140,246 143,915 145,495 Adjusted earnings per diluted share $ 2.44 $ 3.16 $ 2.32 32 The following table reconciles gross profit by segment to consolidated gross profit.
Higher transportation and metals and materials costs negatively impacted the contributive margin. 42 Segments Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
Higher labor, materials, and utilities costs also negatively impacted the gross profit margin. 45 Segments Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
Positive customer and product mix also contributed to the increased prices. 44 O ptoelectronic Components Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 296,384 $ 302,714 $ 236,616 Change versus comparable prior year period $ (6,330 ) $ 66,098 Percentage change versus comparable prior year period (2.1 )% 27.9 % Changes in Optoelectronic Components segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Change in volume (3.6 )% 22.2 % Increase in average selling prices 6.7 % 2.7 % Foreign currency effects (4.7 )% 1.7 % Other (0.5 )% 1.3 % Net change (2.1 )% 27.9 % Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 34.7 % 33.3 % 28.1 % Segment operating margin 28.8 % 27.2 % 21.3 % The Optoelectronic Components segment net revenues decreased slightly versus the prior year.
Average selling prices increased versus the prior year. 47 O ptoelectronic Components Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 243,146 $ 296,384 $ 302,714 Change versus comparable prior year period $ (53,238 ) $ (6,330 ) Percentage change versus comparable prior year period (18.0 )% (2.1 )% Changes in Optoelectronic Components segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Decrease in volume (19.2 )% (3.6 )% Increase in average selling prices 0.5 % 6.7 % Foreign currency effects 0.9 % (4.7 )% Other (0.2 )% (0.5 )% Net change (18.0 )% (2.1 )% Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 25.6 % 34.7 % 33.3 % Segment operating margin 17.7 % 28.8 % 27.2 % Net revenues of the Optoelectronic Components segment decreased significantly versus the prior year.
See Notes 1 and 5 to consolidated financial statements for additional information. 41 Results of Operations Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2022 2021 2020 Costs of products sold 69.7 % 72.6 % 76.7 % Gross profit 30.3 % 27.4 % 23.3 % Selling, general, and administrative expenses 12.7 % 13.0 % 14.8 % Operating income 17.6 % 14.4 % 8.4 % Income before taxes and noncontrolling interest 17.0 % 13.4 % 6.3 % Net earnings attributable to Vishay stockholders 12.3 % 9.2 % 4.9 % ________ Effective tax rate 27.5 % 31.2 % 21.8 % Net Revenues Net revenues were as follows (dollars in thousands) : 2022 2021 2020 Net revenues $ 3,497,401 $ 3,240,487 $ 2,501,898 Change versus prior year $ 256,914 $ 738,589 Percentage change versus prior year 7.9 % 29.5 % Changes in net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Increase in volume 4.3 % 25.5 % Increase in average selling prices 7.2 % 1.0 % Foreign currency effects (4.0 )% 1.4 % Acquisitions 0.4 % 0.7 % Other 0.0 % 0.9 % Net change 7.9 % 29.5 % Net revenues increased significantly in 2022 and 2021 versus the prior years.
See Notes 1 and 5 to consolidated financial statements for additional information. 44 Results of Operations Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2023 2022 2021 Costs of products sold 71.4 % 69.7 % 72.6 % Gross profit 28.6 % 30.3 % 27.4 % Selling, general, and administrative expenses 14.4 % 12.7 % 13.0 % Operating income 14.3 % 17.6 % 14.4 % Income before taxes and noncontrolling interest 13.7 % 17.0 % 13.4 % Net earnings attributable to Vishay stockholders 9.5 % 12.3 % 9.2 % ________ Effective tax rate 30.4 % 27.5 % 31.2 % Net Revenues Net revenues were as follows (dollars in thousands) : 2023 2022 2021 Net revenues $ 3,402,045 $ 3,497,401 $ 3,240,487 Change versus prior year $ (95,356 ) $ 256,914 Percentage change versus prior year (2.7 )% 7.9 % Changes in net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (5.2 )% 4.3 % Increase in average selling prices 1.7 % 7.2 % Foreign currency effects 0.7 % (4.0 )% Acquisitions 0.2 % 0.4 % Other (0.1 )% 0.0 % Net change (2.7 )% 7.9 % Despite the inventory correction that we are experiencing, the long-term prospects for our business remain favorable, and we continue to increase manufacturing capacities for critical product lines.
Average selling prices have increased versus the prior year. 48 Selling, General, and Administrative Expenses Selling, general, and administrative expenses are summarized as follows (dollars in thousands) : Years ended December 31, 2022 2021 2020 Total SG&A expenses $ 443,503 $ 420,111 $ 371,450 as a percentage of sales 12.7 % 13.0 % 14.8 % SG&A expenses for the year ended December 31, 2022 increased versus the year ended December 31, 2021 due to cost inflation.
Average selling prices have increased versus the prior year. 51 Selling, General, and Administrative Expenses Selling, general, and administrative expenses are summarized as follows (dollars in thousands) : Years ended December 31, 2023 2022 2021 Total SG&A expenses $ 488,349 $ 443,503 $ 420,111 as a percentage of sales 14.4 % 12.7 % 13.0 % SG&A expenses for the year ended December 31, 2023 increased versus the year ended December 31, 2022 due to general inflation and higher compensation costs, including the implementation of the 2023 Long-Term Incentive Plan in 2023.
The following table summarizes the components of net cash and short-term investments (debt) (in thousands) : December 31, 2022 December 31, 2021 Credit Facility $ 42,000 $ - Convertible senior notes, due 2025 465,344 465,344 Deferred financing costs (6,407 ) (9,678 ) Total debt 500,937 455,666 Cash and cash equivalents 610,825 774,108 Short-term investments 305,272 146,743 Net cash and short-term investments (debt) $ 415,160 $ 465,185 "Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP.
The following table summarizes the components of net cash and short-term investments (debt) (in thousands) : December 31, 2023 December 31, 2022 Credit facility $ - $ 42,000 Convertible senior notes, due 2025 95,102 465,344 Convertible senior notes, due 2030 750,000 - Deferred financing costs (26,914 ) (6,407 ) Total debt 818,188 500,937 Cash and cash equivalents 972,719 610,825 Short-term investments 35,808 305,272 Net cash and short-term investments (debt) $ 190,339 $ 415,160 "Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP.
We make these estimates based upon sales levels to our customers during the period, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs.
We make these estimates based upon sales levels to our customers during the period, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs. We utilize a number of different methodologies and consider several factors when estimating the accruals.
The decrease is primarily due to increased logistics, labor, and materials costs, manufacturing inefficiencies, lower sales volume, and negative foreign currency impacts, partially offset by increased average selling prices and cost reductions. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices increased slightly versus the prior year.
The decrease is due to lower sales volume, higher labor and materials costs, and other inflationary impacts, partially offset by increased average selling prices, lower metals and logistics costs, and favorable exchange rate impacts. Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit. Average selling prices increased versus the prior year.
The computation of these ratios is prescribed in Article VI of the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which has been filed with the SEC as Exhibit 10.1 to our current report on Form 8-K filed June 5, 2019. We were in compliance with all financial covenants under the credit facility at December 31, 2022.
The computation of these ratios is prescribed in Article VI of the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which was filed with the SEC as Exhibit 10.1 to our current report on Form 8-K filed May 8, 2023.
Gross Profit and Margins Gross profit margins for the year ended December 31, 2022 were 30.3%, as compared to 27.4% for the year ended December 31, 2021. The increase in gross profit margin is primarily due to increased average selling prices and increased sales volume.
Gross Profit and Margins Gross profit margins for the year ended December 31, 2023 were 28.6%, as compared to 30.3% for the year ended December 31, 2022. The decrease in gross profit margin is primarily due to decreased sales volume.
To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
("MaxPower"), acquired in 2022, and key niche suppliers to vertically integrate our supply chain, such as Centerline Technologies, LLC, acquired in 2023. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due before June 2024 when our revolving credit facility expires. The convertible senior notes due 2025 are not currently convertible.
Additional acquisition activity, convertible debt repurchases, or conversion of our convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on our debt are due before 2025. 55 On September 12, 2023, we issued $750 million convertible senior notes due 2030.
The gross profit margin increased versus the prior year. The increase is due to increased sales volume, increased average selling prices, manufacturing efficiencies, and cost reduction measures, partially offset by increased labor, materials, metals, and logistics costs. Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit.
Gross profit margin decreased versus the prior year primarily due to lower sales volume and higher materials, labor, and fixed costs, partially offset by higher average selling prices. Segment operating margin decreased versus the prior year primarily due to decreased gross profit.
Discrete tax items impacted our effective tax rate for each period presented. These items were $20.0 million in 2022, $39.3 million in 2021, and $2.0 million in 2020.
Discrete tax items impacted our effective tax rate for each period presented. These items were $20.0 million in 2022 and $39.3 million in 2021. There were no unusual tax transactions that impacted the effective tax rate for the year ended December 31, 2023.
We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating acquisition opportunities, particularly of specialty businesses. 47 Capacitors Net revenues of the Capacitors segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 509,645 $ 472,167 $ 361,542 Change versus comparable prior year period $ 37,478 $ 110,625 Percentage change versus comparable prior year period 7.9 % 30.6 % Changes in Capacitors segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Increase in volume 8.0 % 25.0 % Increase in average selling prices 5.6 % 1.8 % Foreign currency effects (5.5 )% 2.0 % Other (0.2 )% 1.8 % Net change 7.9 % 30.6 % Gross profit margins and segment operating margins for the Capacitors segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 24.3 % 22.4 % 19.4 % Segment operating margin 20.6 % 18.1 % 14.0 % Net revenues of the Capacitors segment increased significantly versus the prior year.
We have greatly increased our manufacturing capacity for power inductors in the past year. 50 Capacitors Net revenues of the Capacitors segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 498,741 $ 509,645 $ 472,167 Change versus comparable prior year period $ (10,904 ) $ 37,478 Percentage change versus comparable prior year period (2.1 )% 7.9 % Changes in Capacitors segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (5.1 )% 8.0 % Increase in average selling prices 2.2 % 5.6 % Foreign currency effects 0.9 % (5.5 )% Other (0.1 )% (0.2 )% Net change (2.1 )% 7.9 % Gross profit margins and segment operating margins for the Capacitors segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 25.3 % 24.3 % 22.4 % Segment operating margin 21.1 % 20.6 % 18.1 % Net revenues of the Capacitors segment decreased slightly versus the prior year.
The following table summarizes activity pursuant to this policy (in thousands): Year ended December 31, 2022 Dividends paid to stockholders $ 57,187 Stock repurchases 82,972 Total $ 140,159 As a direct result of a change in tax law in Israel, we made the determination during the fourth quarter of 2021 that substantially all unremitted foreign earnings in Israel are no longer permanently reinvested.
The following table summarizes activity pursuant to this policy (in thousands): Years ended December 31, 2023 December 31, 2022 Dividends paid to stockholders $ 55,626 $ 57,187 Stock repurchases 78,684 82,972 Total $ 134,310 $ 140,159 During the fourth quarters of 2022 and 2021, we determined that substantially all unremitted foreign earnings in Germany and Israel, respectively, are no longer indefinitely reinvested.
The Asia and Europe regions contributed to the decrease, while the Americas region increased. Sales to distributor customers and automotive and industrial end markets decreased, partially offset by increases to EMS customers and military and aerospace end market customers. The gross profit margin decreased versus the prior year.
The decrease is primarily due to decreased sales to distribution and EMS customers and customers in the Americas and Asia regions, partially offset by increased sales to industrial end market customers. The gross profit margin increased versus the prior year.
Additionally, our convertible senior notes due 2025 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated. Borrowings under the credit facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on our leverage ratio.
Additionally, our convertible senior notes due 2025 and due 2030 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.
Our cost management strategy also includes a focus on controlling fixed costs recorded as costs of products sold or selling, general, and administrative expenses and maintaining our break-even point (adjusted for acquisitions). We seek to limit increases in selling, general, and administrative expenses to the rate of inflation, excluding foreign currency exchange effects and substantially independent of sales volume changes.
Our cost management strategy also includes a focus on controlling fixed costs recorded as costs of products sold or selling, general, and administrative expenses and maintaining our break-even point (adjusted for acquisitions).
We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022. 43 Diodes Net revenues of the Diodes segment were as follows (dollars in thousands): Years ended December 31, 2022 2021 2020 Net revenues $ 765,220 $ 709,416 $ 502,548 Change versus comparable prior year period $ 55,804 $ 206,868 Percentage change versus comparable prior year period 7.9 % 41.2 % Changes in Diodes segment net revenues were attributable to the following: 2022 vs. 2021 2021 vs. 2020 Change attributable to: Increase in volume 1.8 % 34.2 % Increase in average selling prices 9.7 % 2.9 % Foreign currency effects (3.7 )% 1.2 % Other 0.1 % 2.9 % Net change 7.9 % 41.2 % Gross profit margins and segment operating margins for the Diodes segment were as follows: Years ended December 31, 2022 2021 2020 Gross profit margin 25.9 % 23.7 % 17.9 % Segment operating margin 23.1 % 20.6 % 13.9 % Net revenues of the Diodes segment increased significantly in 2022.
Our pending acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment. 46 Diodes Net revenues of the Diodes segment were as follows (dollars in thousands): Years ended December 31, 2023 2022 2021 Net revenues $ 690,540 $ 765,220 $ 709,416 Change versus comparable prior year period $ (74,680 ) $ 55,804 Percentage change versus comparable prior year period (9.8 )% 7.9 % Changes in Diodes segment net revenues were attributable to the following: 2023 vs. 2022 2022 vs. 2021 Change attributable to: Change in volume (11.0 )% 1.8 % Increase in average selling prices 1.0 % 9.7 % Foreign currency effects 0.4 % (3.7 )% Other (0.2 )% 0.1 % Net change (9.8 )% 7.9 % Gross profit margins and segment operating margins for the Diodes segment were as follows: Years ended December 31, 2023 2022 2021 Gross profit margin 25.4 % 25.9 % 23.7 % Segment operating margin 22.2 % 23.1 % 20.6 % Net revenues of the Diodes segment decreased significantly in 2023.
Our interest coverage ratio and leverage ratio were 32.78 to 1 and 0.65 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections.
We were in compliance with all financial covenants under the credit facility at December 31, 2023. Our interest coverage ratio and net leverage ratio were 17.83 to 1 and 0.84 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections.
Gross profit margin increased versus the prior year quarter primarily due to higher average selling prices.
Average selling prices decreased versus the fourth fiscal quarter of 2022 and prior fiscal quarter. Gross profit margin decreased versus the prior fiscal quarter and prior year quarter primarily due to lower volume.
While we utilize a number of different methodologies to estimate the accruals, all of the methodologies take into account sales levels to customers during the relevant period, inventory levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits.
Some of the factors that we consider are sales levels to customers during the relevant period, inventory levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. These procedures require the exercise of significant judgments.
The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. 35 Acquisition Activity As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components.
The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations. 35 Financial Metrics We utilize several financial metrics to evaluate the performance and assess the future direction of our business.
Average selling prices increased versus the prior year. We are increasing critical manufacturing capacities for certain product lines.
We are increasing critical manufacturing capacities for certain product lines.
We also pay a commitment fee, also based on our leverage ratio, on undrawn amounts. Based on our current leverage ratio, any new borrowings will bear interest at LIBOR plus 1.50%, and the undrawn commitment fee is 0.25% per annum.
Based on our current total leverage ratio of 1.19 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 1.60% (including the applicable credit spread), and the undrawn commitment fee is 0.25% per annum.
Cash flows provided by operating activities were $484.3 million for the year ended December 31, 2022, as compared to cash flows provided by operations of $457.1 million for the year ended December 31, 2021.
Cash flows provided by operating activities were $365.7 million for the year ended December 31, 2023, as compared to cash flows provided by operations of $484.3 million for the year ended December 31, 2022. In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle.
Our revolving credit facility provides an aggregate commitment of $750 million of revolving loans available until June 5, 2024. The maximum amount available on the revolving credit facility is restricted by the financial covenants described below.
The maximum amount available on the revolving credit facility is restricted by the financial covenants described below.
The inclusion of this acquisition did not have an impact on the Company's consolidated results for the years ended December 31, 2022 and 2021. There is no assurance that we will be able to identify and acquire additional suitable acquisition candidates at price levels and on terms and conditions we consider acceptable.
There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility, or identify and acquire additional suitable acquisition candidates at price levels and on terms and conditions we consider acceptable.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAccordingly, we monitor several important cross-rates. 55 We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2022, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
Biggest changeThe acquisition price for Nexperia's Newport wafer fab is denominated in U.S. dollars. 58 We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2023, using a model that measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
Based on the debt and cash positions at December 31, 2022, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by approximately $3.3 million. See Note 6 to our consolidated financial statements for additional information about our long-term debt.
Based on the debt and cash positions at December 31, 2023, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our annualized net earnings by approximately $3.6 million. See Note 6 to our consolidated financial statements for additional information about our long-term debt.
Foreign Exchange Risk We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward contracts as of December 31, 2022.
Foreign Exchange Risk We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward contracts as of December 31, 2023.
On a selective basis, we have in the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of December 31, 2022, 2021, and 2020 we did not have any outstanding interest rate swap or cap agreements.
On a selective basis, we have in the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of December 31, 2023, 2022, and 2021 we did not have any outstanding interest rate swap or cap agreements.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2022. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $10.0 million at December 31, 2022, although individual line items in our consolidated statement of operations would be materially affected.
The foreign currency exchange rates we used were based on market rates in effect at December 31, 2023. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would impact our net earnings by approximately $15.3 million at December 31, 2023, although individual line items in our consolidated statement of operations would be materially affected.
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $9.6 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices. 56
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $8.5 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices. 59
We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of our other major currencies, our operating profit is slightly increased.
We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of our other major currencies, our operating profit is slightly increased. Accordingly, we monitor several important cross-rates.
Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks. At December 31, 2022, we had $610.8 million of cash and cash equivalents and $305.3 million of short-term investments, which earn interest at various variable rates.
Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks. At December 31, 2023, we had $972.7 million of cash and cash equivalents and $35.8 million of short-term investments, which earn interest at various variable rates.
The interest paid on our credit facility is based on a LIBOR spread. At December 31, 2022, we had no amounts outstanding under the revolving credit facility. Future borrowings under the revolving credit commitment will bear interest at LIBOR plus 1.50%.
The interest paid on our credit facilities is based on variable reference rates and an interest margin. At December 31, 2023, we had no amounts outstanding under our revolving credit facilities. Future U.S. dollar borrowings under the revolving credit commitment will bear interest at SOFR plus 1.60%.
Added
Upon completion of the acquisition of Nexperia's Newport wafer fab, we anticipate greater exposure to British sterling, where costs incurred in British sterling are expected to exceed sales denominated in British sterling.

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